Four Precautions to Make Risk-Free Property Purchase in Pakistan
Real estate investment is one of the most popular types of investments in Pakistan, since it promises all time-high rental yields and tremendous capital growth over the years. Not only locals, but foreigners are also eyeing property in Pakistan especially Lahore and Islamabad property for real estate investment. This is because they consider Pakistan real estate a safe and stable investment spot which provides the best hedge against inflation. Although property investment in Pakistan is risk free but unfortunately, the property purchase process is not.
The decades old land system in Pakistan contains several loopholes which lead buyers to lose their hard earned money due to possible frauds on part of selling parties. There have been cases can where investors not having enough market knowledge and knowhow of the property purchase process in Pakistan lost their lifelong savings. This shows purchasing property in Pakistan is a not a risk-free and smooth process but once you purchase property here successfully you are promised to get rewards.
Though investment in Pakistan real estate sector is rewarding but the sector rewards only those who work hard to make the investment process favourable for them. Besides having appropriate market knowledge, buyers should also apply several due diligence techniques during the process of purchasing property in Pakistan, since it's a matter of their lifetime savings, so they should mitigate every risk involved in it. In order to make a risk free property purchase in Pakistan, buyers should never miss to take the following four precautionary measures.
Check Property Title of Seller
The buyer must check the ownership title of seller from whom they are going to purchase property. Many times properties are sold by sellers who are not the original owners of the property. Checking title deed of the property before closing the deal or making any advance payment assures that the seller is the original owner of property and is willing to transfer his property to buyers against an agreed price in good faith. In order to avoid counterclaims, it's better for buyers to also check title deeds of previous sellers for last 20-30 years.
Inspect Documentation
Buyers must also inspect different documents according to the nature of their purchase. For a typical purchase, buyers should inspect original sale deed, previous title transfer documents and a certificate displaying a graphical image of the exact property location. For commercial property in Pakistan, buyers must be extra careful because many times they buy commercial property where business activities are not allowed. Buyers, if conduct business activities on this property, they are charged hefty penalties. For commercial property, buyers must also inspect ‘No Objection Certificate' and the approval of commercialization before closing the deal.
Verify the Attorney
Property transactions taking place through attorneys is a common practice in Pakistan. Buyers should always prefer to deal with the owner directly, since property transactions done through attorneys are quite risky and complicated. If buyers have no other option than to buy through attorneys, they must try their best to establish contacts with property owners. Buyers should also take proper actions to investigate the identity, authority and powers of attorney. They should check ‘Specific or General Power of Attorney' document and investigate its validity and record with the sub registrar office.
Investigate Quoted Price
It's no secret that many times sellers of Pakistan properties inflate prices on their own. Those buyers who don't have real-time price knowledge of the market are the ones who end up paying a high price for the property. Buyers must not only rely on bank surveys but should hire a specialist for conducting a detailed survey of the property. Detailed examination of the property reveals its true market value. Moreover, buyers must not forget that quoted property prices are not final and they can always hunt good bargains from sellers depending on their negotiation skills.
Applying this due diligence before and during the process of purchase will make property buying a risk free and pleasant experience in Pakistan.
The decades old land system in Pakistan contains several loopholes which lead buyers to lose their hard earned money due to possible frauds on part of selling parties. There have been cases can where investors not having enough market knowledge and knowhow of the property purchase process in Pakistan lost their lifelong savings. This shows purchasing property in Pakistan is a not a risk-free and smooth process but once you purchase property here successfully you are promised to get rewards.
Though investment in Pakistan real estate sector is rewarding but the sector rewards only those who work hard to make the investment process favourable for them. Besides having appropriate market knowledge, buyers should also apply several due diligence techniques during the process of purchasing property in Pakistan, since it's a matter of their lifetime savings, so they should mitigate every risk involved in it. In order to make a risk free property purchase in Pakistan, buyers should never miss to take the following four precautionary measures.
Check Property Title of Seller
The buyer must check the ownership title of seller from whom they are going to purchase property. Many times properties are sold by sellers who are not the original owners of the property. Checking title deed of the property before closing the deal or making any advance payment assures that the seller is the original owner of property and is willing to transfer his property to buyers against an agreed price in good faith. In order to avoid counterclaims, it's better for buyers to also check title deeds of previous sellers for last 20-30 years.
Inspect Documentation
Buyers must also inspect different documents according to the nature of their purchase. For a typical purchase, buyers should inspect original sale deed, previous title transfer documents and a certificate displaying a graphical image of the exact property location. For commercial property in Pakistan, buyers must be extra careful because many times they buy commercial property where business activities are not allowed. Buyers, if conduct business activities on this property, they are charged hefty penalties. For commercial property, buyers must also inspect ‘No Objection Certificate' and the approval of commercialization before closing the deal.
Verify the Attorney
Property transactions taking place through attorneys is a common practice in Pakistan. Buyers should always prefer to deal with the owner directly, since property transactions done through attorneys are quite risky and complicated. If buyers have no other option than to buy through attorneys, they must try their best to establish contacts with property owners. Buyers should also take proper actions to investigate the identity, authority and powers of attorney. They should check ‘Specific or General Power of Attorney' document and investigate its validity and record with the sub registrar office.
Investigate Quoted Price
It's no secret that many times sellers of Pakistan properties inflate prices on their own. Those buyers who don't have real-time price knowledge of the market are the ones who end up paying a high price for the property. Buyers must not only rely on bank surveys but should hire a specialist for conducting a detailed survey of the property. Detailed examination of the property reveals its true market value. Moreover, buyers must not forget that quoted property prices are not final and they can always hunt good bargains from sellers depending on their negotiation skills.
Applying this due diligence before and during the process of purchase will make property buying a risk free and pleasant experience in Pakistan.